An Unreasonable Man

Blockbuster vs Netflix December 23, 2006

Micheal Arrington explains why he switched from Netflix to Blockbuster. He also provides some insight into how Netflix operates:

For the business to work, the average has to be less than five movies per customer per month. If customers return movies too quickly, your only real choice is to slow down their shipments. Netflix and all of the competing services have complicated algorithms that add a day or two here and there to the “received date” when customers return DVDs. One way or another, high velocity customers are slowed down. And if they leave, that’s fine. They weren’t profitable anyway.